Buying Mortgage Leads, Three Things to Consider

Navigating the Mortgage Leads Market: What You Need to Know

For mortgage brokers and loan officers, investing in mortgage leads can be a strategic move to grow your business and boost your pipeline. However, entering this market requires careful consideration and research to ensure that you are making a wise investment. Here’s a guide to help you evaluate mortgage lead companies and make informed decisions.

1. Understanding Lead Sources

Where Did the Lead Come From?

• Lead Generation Methods: Different companies use various methods to generate leads. Common methods include:

  • E-mail Campaigns: Leads are generated through targeted e-mail marketing.

  • Search Engine Ads: Ads placed on search engines to attract potential clients.

  • Proprietary Websites: Leads are captured through company-owned websites.

  • Bulk Purchases: Companies purchase leads in bulk from other sources and resell them.

• Importance of Source: Understanding where the leads come from helps you gauge their quality and relevance. Directly generated leads from targeted methods often have higher conversion potential compared to bulk-purchased leads.

2. Evaluating Lead Freshness

Is the Lead Fresh or Recycled?

• Fresh Leads: These are typically generated in real time and are relatively new (usually within a day). They are often more expensive but tend to have higher conversion rates because they reflect the most current interest and urgency.

• Recycled Leads: These leads may have been sold multiple times or bought in bulk at a lower cost. While cheaper, they might be less effective because they could have already been contacted by multiple brokers or may be outdated.

• Cost vs. Quality: Fresh leads generally cost more than recycled ones. Decide if you need high-quality, immediate leads (and are willing to pay a premium) or if you prefer a larger volume of less expensive leads.

3. Assessing Lead Quality and Return Policies

If the Lead Is Bad, Will You Get Your Money Back?

• Return Policy: Ensure that the lead company offers a clear and fair return policy. Even with the best technology, some leads might turn out to be invalid or inaccurate. A good lead provider should have a system in place for handling such situations, including offering refunds or replacements.

• Lead Verification: Reputable companies use software and verification processes to filter out fake or incorrect leads. However, it’s crucial to understand their process and know your recourse if issues arise.

Tips for Success

• Do Your Research: Before committing, research multiple lead companies. Compare their methods, prices, and customer feedback. Look for reviews and testimonials to get a sense of their reputation.

• Test with Caution: Start with a small test batch of leads to evaluate the quality before making a larger investment. This allows you to assess their effectiveness without a significant financial commitment.

• Track Your Results: Monitor the performance of the leads you purchase. Track metrics such as conversion rates, follow-up success, and overall ROI to determine if the investment is paying off.

• Build Relationships: Consider building long-term relationships with lead providers. They may offer better rates or exclusive leads if they know you’re a regular and valued customer.

By carefully evaluating these factors and performing due diligence, you can make an informed decision about purchasing mortgage leads and optimize your chances of success in the competitive mortgage market.